Elon Musk will spend $6 billion (from where unknown) to remove Tesla’s loans from the recent Twitter acquisition.
After a tense month with Tesla stock, Elon Musk will no longer be spending money on his Twitter acquisition by taking on debt based on his Tesla shares.
In a letter to the Securities and Exchange Commission, Elon Musk announced the expiration of a series of margin loans against Tesla stock that were included in the plan. His initial financing for the acquisition of Twitter. Musk pledged an additional $6.25 billion in equity, bringing his total commitment to $33.5 billion.
Elon Musk wants to remove Tesla loans from the Twitter deal.
Musk’s original plan to acquire Twitter involved a combination of $21 billion in personal equity and $25.5 billion in loans. Of those loans, $12.5 billion was secured by Tesla shares owned by Musk. Musk cut this figure in half with an earlier round of equity funding and has now restructured the deal to eliminate them altogether.
The move comes in response to growing pressure on loans and Tesla stock in general. Its stock price has fallen since Musk announced plans to buy Twitter, with a drop of more than 30% in value within a month.
It’s unclear where Musk’s additional $6.25 billion came from, although a number of equity partners have emerged since Musk first announced the bid. Earlier in May, Musk announced another $7 billion in private equity funding, including from Oracle founder Larry Ellison and Qatar’s sovereign wealth fund.
Despite legally pledging to take ownership of Twitter, Musk remains firm about his immediate plans around the deal. On May 13, he announced that the deal with Twitter was “on hold” pending a further investigation into the automated accounts on the platform. More recently, he called on the SEC to investigate the social media platform’s claims about bot accounts.
Tens of thousands of other Twitter users were quite amused by the above comments.